7 Life Lessons I Learned from the Founder of Zappos9 min read

The founder of Zappos, Tony Hsieh, is worth nearly a billion dollars.

Zappos is also regularly listed on Fortune 100’s “best companies to work for.” How did Tony Hsieh develop such a successful company?

He started a profitable button-making business in middle school. A profitable pizza joint while studying at Harvard, and sold a business to Microsoft for $265 at age 25.

He must be doing something right. Or, at least, that’s what I thought. I wondered, what drives him? What are his passions? His guiding principles? What makes him succeed over the millions of other wannabe entrepreneurs?

So I picked up his book, Delivering Happiness. Here are 7 Life Lessons I learned from the founder of Zappos.

1. Chase the Passion

First, they ignore you, then they laugh at you, then they fight you, then you win

Ghandi

Most people never get past the ignore phase.

To succeed you need to work hard consistently. It will be a long time before you see success. So pick something you are passionate about, that way you continue to drive, to push, to bleed, because the people that bleed succeed (see what I did there?!!)

I started a few small businesses. A google calendar ebook, a website that posted the “newest tech,” and another website that gave poker advice. At one point I began reselling items on eBay.

None of the ventures succeeded. They all failed.

I spent a month on each, then quit because I didn’t enjoy it and I didn’t see immediate returns. That mindset, and those ventures, were destined to fail no matter what. My heart wasn’t in it. Tony says doing something for the sole reason of making money, is never a good enough reason to do that thing.

When Tony Hsieh sold his first company, Link Exchange, part of the deal was to stay for twelve months after the company was bought. If he left he would have to give up around $8,000,000. He thought (as I did), easy! If I just sit around for a year I can make a quick eight million. But slowly he realized something wasn’t right.

Here he was, 25, making more money than most people in a lifetime, but he wasn’t happy. He was not passionate about the company anymore.

When he realized that, he quit.

He walked away from nearly 8 million dollars because he was not passionate about what he was doing. What happened next? He started a billion-dollar company.

He walked away to chase his passion.

Could you?

2. Pick the Right Table

In poker, there are good players, bad players, and sharks (really really good poker players). Tables usually sit 10 players. Where would you rather sit, a table with 9 bad players or 9 sharks?

The answer is obvious, but many people still seem to sit at the shark table. They even stay there after they have lost some money, claiming, “I can win it back! I’m learning about these players.” I fell into this trap a couple of times, but as I got better I learned to get up, to switch tables.

When something isn’t working, when the market is too hard to beat. Just get up. Change tables. Find a table (market) where you are more likely to succeed.

Imagine if you were the most efficient manufacturer of seven-fingered gloves. You offer the best selection, the best service, and the best prices for seven-fingered gloves – but if there isn’t a big enough market for what you sell, you won’t get very far.”

Tony Hsieh

Don’t stick with something that’s clearly oversaturated or with something where there is clearly no market.

3. Solve a Problem YOU Understand

Never invest in a business you cannot understand.

Warren Buffet

The most successful people solve a problem that they have, that they understand.

Steve Jobs created Apple because he wanted a personal computer. He thought the current computers were “impractical.”

Jeff Bezos wanted access to an online bookstore.

Regular people can succeed using this theory as well.

The other day I was listening to a podcast about two young Cornell entrepreneurs who majored in computer science. They would stay up late in the library pulling all-nighters.

Over time their backs started to hurt from sitting in the chairs for so long. They bought the standard “back support” devices but they were not happy with them.

Their backs still hurt.

They thought we need something better. Maybe we can make something better.

At first only for themselves, then other students wanted them, soon they were manufacturing these back-support devices.

And they did.

In 2018 SupportiBack, their company, generated an 8-figure revenue. Both of these Cornell Students were 21 at the time.

4. Think Long-Term

Most people overestimate what they can do in 1 year and underestimate what they can do in 20 years.

Bill Gates

This is why I gave myself a two-year challenge. Make one video a week, for two years. To make at least 100 videos. There! It’s public! I have to do it…

I fall into the trap, often, of worrying about the score. For example sometimes when I am at the gym I just can’t lift as much. There is no rhyme or reason to it I just can’t lift as much as I usually do.

I think, am I doing something wrong, why aren’t I improving? I make sure to just keep showing up. And you know what? If I look back a year ago, or two years ago. I am definitely doing more. I am definitely getting stronger, even if I don’t see immediate results.

Keep showing up.

Stanford did an experiment in the 70s where they sat a child down in a room and presented a marshmallow.

The researcher then said they were going to leave the room and the child could eat the marshmallow if he wanted. But, if the child waited for the researcher to come back the kid would be rewarded with another marshmallow.

So there was one set of children that waited, and received two marshmallows, and another set of children that did not wait, and ate one.

All the children in the study were then followed over many years. It was found that the kids that waited were shown to have better life outcomes, measured by SAT scores, BMI, and educational level.

Zappos was hanging on by a string many many times. At one point Tony had to sell his penthouse in order to keep Zappos alive. Tony thought in the long-term though. He believed in Zappos.

Be patient and think long-term. The players with the most stamina and focus usually win.

Tony Hsieh

5. Reputation is Vital

A good reputation is more important than money. Especially in the long term.

Warren Buffet, Richard Branson, and Henry Ford all emphasize the importance of reputation.

It is fairly easy to think of public figures who have messed up their career by pulling a small stunt. All these people had their life set on a goal and I’m sure worked extremely hard to get to where they were.

However, a bad choice showed me their true character. Now I can’t follow them anymore. I don’t trust them. I don’t believe in them.

They ruined their reputation. They lost their career.

Zappos is built on a good reputation.

Tony Hsieh emphasizes reputation so much, that when a third party shipper couldn’t deliver (pun intended) he, with the help of his team, developed his own shipping warehouse.

Customers come first. +1 for the Zappos reputation.

After a night of drinking, Tony Hsieh was out with a couple of friends and ended up in a hotel room in Santa Monica. One of his friends from Skechers wanted Pizza but the hotel was no longer delivering room service because it was too late at night. So the Skechers person called Zappos as a joke.

I thought the customer service representative would quickly hang up. I was wrong. The representative described where to find some pepperoni pizza, laying out the five closest places that still delivered pizza.

Now if everyone called and asked for pizza, the cost to Zappos would be immense. But very few people actually call for pizza.

Many people, however, want to buy from a company that cares about its customers. A company with a good reputation.

6. Never Stop Learning

Every Zappos employee has to go through a rigorous training period. In fact Tony Hsieh emphasized the importance of the training so much that if people don’t like it and don’t want to do it anymore he pays them to quit.

If you quit today, we will pay you for the amount of time you had worked, plus a $2,000 bonus

Tony Hsieh

How many take that option? Tony says less than 1%.

There is a required reading list for employees at zappos.

There is a library at Zappos.

There are classes at Zappos.

All for free. All for employees just so they can improve themselves.

The founder of Zappos didn’t stop at his first venture, a worm farm (which failed miserably), he continued to learn. He continued to try new things. The worm farm was not a failure, it was a lesson. Tony didn’t think, “hmm creating businesses isn’t for me, I think I will quit forever,” No! He kept going.

He sold buttons, advertisements, pizza, and, finally, shoes.

Tony Hsieh never stopped learning.

I love this mindset because it encourages me to continue to try new things. I often fail, but every failure teaches me something new.

7. Be Nice

Be nice and make friends. It’s a small community

Tony Hsieh

This is so important, yet so underappreciated. The value of simple good manners is amazing. You never know who you are going to meet.

Being nice applies to medical school interviews. Applicants that are rude to the secretary and my school are rejected. It’s that simple.

I try to act like the dean of my medical school will watch my videos, visit my blog, and go on my Instagram. You never know who you are talking to.

Tony applied this ideology to a relationship that was normally always confrontational. Vendors and retailers.

Being nice works, in-fact it is so important to Zappos it is a core value:

“Give great service to everyone: customers, employees, and vendors.”

And they do. And they are rewarded appropriately.

Summary

1. Chase the Passion: What inspires you? What do you lose track of time doing? Do that.
2. Pick the Right Table: It is very hard to succeed in a non-existent market. Pick a market where you can succeed.
3. Think Long-Term: What will provide future me the biggest benefit? What may be hard in the short-term, but provide amazing benefits in the long-term?
4. Solve a Problem YOU Understand: Are you a painter? Develop the next best brush that paints the way you want it to! Or the next best painting class! Don’t develop earphones because you don’t know about earphones.
5. Reputation is Vital: It takes years and years and years to build a good reputation, and seconds to destroy it.
6. Never Stop Learning: Constantly be learning new things, trying things, failing at new things. Experience and failure are two of the best teachers.
7. Be Nice: You never know who you are going to meet, or who you might talk to, or who might be your next business partner. Be nice.

Thanks for reading! This book was great and I learned quite a bit from it. Hopefully I can implement at least a few into my everyday life.

-Zach